Latest news with #TrumpTariffs
15 hours ago
- Automotive
Hit the Brakes: Slowdown in Japan Auto Exports to the United States
The impact of US President Donald Trump's tariffs has led to a sudden slowdown in Japanese auto exports to the United States. Japan's auto industry appears to have responded by lowering its prices to absorb the impact of the tariffs, prompting some analysts to predict a major blow to the profits of the industry as a whole. On top of his tariffs applied across the board to Japanese exports to the US market, Trump imposed an additional 25% tariff on automobiles and auto parts. The Japanese government has been negotiating with the United States in an effort to have the tariffs removed, but no agreement has been reached as of June. Recently, Trump has talked about further increasing the automotive tariffs. Trade statistics from the Ministry of Finance show that in May, the second month since the initial imposition of tariffs on automobiles, the export value of Japanese cars to the United States was ¥363.4 billion, which was the lowest level for over a year. This was down 24.7% compared with May 2024, far greater than the equivalent 4.8% year-on-year drop in April. While the decrease in the number of vehicles sold was only 3.9%, the fall in unit price was 21.7%. As there has been little change in the value of the yen since April, this is not a factor in reduced prices. NLI Research Institute suggests that Japanese automakers are absorbing a certain amount of the tariff costs by lowering prices. An estimate produced by the institute forecasts that if export prices continue to be reduced by 10%, this would mean a decrease in ordinary profits of ¥1.3 trillion for Japan's auto industry in fiscal 2025. This could be a greater hit than the fall resulting from a 10% reduction in sales volume, such as that seen if tariff costs were passed on to buyers in the form of higher prices. As noted by Saitō Tarō, who heads the institute's economic research department, 'Even if lower prices keep volume high, variable costs for things like materials will put major pressure on profits.' Impact of Trump Tariffs on Japanese Auto Industry (YOY) 10% reduction in sales volume Ordinary profits: Down ¥0.2 trillion Variable costs rate: Unchanged 10% reduction in prices Ordinary profits: Down ¥1.3 trillion Variable costs rate: Up 1.2% Taken by from an estimate by NLI Research Institute. The variable costs rate refers to the ratio of variable costs to sales. Data Sources (Translated from Japanese. Banner photo © Pixta.)
Yahoo
2 days ago
- Business
- Yahoo
The Fed holds interest rates steady again as officials wait for the effects of Trump's tariffs
The Federal Reserve held interest rates steady again Wednesday as officials continue to wait for the fallout of President Donald Trump's sweeping policy changes and tensions in the Middle East. The central bank left its benchmark lending rate unchanged at a range of 4.25% to 4.5%, where it has been since January. Economists widely expect Trump's erratic trade war to push up prices and eventually cause unemployment to climb. So far, Trump's tariffs have resulted in a surge of imports into the US, which has taken a toll on economic growth. However, inflation has been tame and the labor market remains in decent shape. Still, Fed officials don't expect that to last: New economic projections show that officials expect unemployment to rise this year more than estimated in March — and for prices to pick up more than they previously thought. Fed policymakers overall continue to expect two rate cuts this year, according to the median projection, though seven of them expect no rate cut at all, up from four back in March. Whenever the Fed deems it appropriate to deliver a rate cut, it'll likely be because of rising unemployment — what investors refer to as a 'bad news rate cut.' That's because American consumers and businesses are expected to soon feel the sting of Trump's tariffs, economists say, and there are already some potential signs of consumers becoming cautious with their spending. Retail sales, which comprise a sizable chunk of overall spending, dropped sharply last month as car purchases plummeted. That's key because consumer spending accounts for about two-thirds of the US economy. For now, Fed officials are inclined to wait longer for some clarity, not just on tariffs, but also to see whether a brewing conflict in the Middle East spirals out of control. The economy's future largely depends on what happens with trade policy. The Trump administration has so far brokered two trade agreements — with the United Kingdom and China — but the administration still has more than a hundred to go. Bilateral trade agreements typically take years of detailed discussions between countries, but Trump identified July 8 as his deadline to hash out deals with every US trading partner, before the massive tariff hikes he unveiled in early April go back into effect. Treasury Secretary Scott Bessent last week said Trump will likely delay his tariffs even more for countries that are actively negotiating with the administration. The Fed is patiently watching the trade situation continue to play out, but now it's also keeping an eye on what's going on in the Middle East. The Israel-Iran conflict that erupted last week has escalated in recent days, with the United States mulling military involvement. The conflict has already resulted in surging global oil prices, which could translate into higher prices in the US if there continue to be disruptions to global energy supply. And even if energy prices in the US climb, it's a high bar for the Fed to go back to hiking interest rates. Fed officials are also keeping tabs on the president's tax and spending bill, currently being reviewed by the Senate. The provisions in the version of Trump's megabill that passed the House would would boost the economy 0.8% over about three decades — compared to its estimate of 1.7% for the 2017 bill, the right-leaning Tax Foundation estimates. This story is developing and will be updated.
Yahoo
3 days ago
- Business
- Yahoo
US retail sales slip more than expected after rush to beat tariffs
US retail sales declined more than expected in May, government data showed Tuesday, dragged by a slowdown in auto sales as consumers pulled back after hurrying to get ahead of President Donald Trump's sweeping tariffs. As Trump's levies begin to take effect through the country, analysts are keeping a close watch on how consumers -- a critical driver of the world's biggest economy -- respond to resulting uncertainty and any price increases down the line. Last month, overall sales fell by 0.9 percent from April to $715.4 billion, according to data released by the Department of Commerce. It was the largest decline since the start of the year, and bigger than the 0.6 percent drop expected by a consensus forecast. From a year ago, retail sales were up 3.3 percent, still a slowdown from the 5.0 percent rate in April. Analysts said consumers likely brought forward major purchases like cars in anticipation of Trump's tariffs -- the president imposed a sweeping 10 percent levy on almost all US partners in April. Trump also separately slapped steeper tariffs on imports of steel, aluminum and automobiles, fueling concern that these would push inflation up in the coming months. Excluding autos and parts, retail sales in May were still 0.3 percent down from the prior month. Sales at motor vehicle and parts dealers slumped 3.5 percent on-month, while those at restaurants and bars fell 0.9 percent. Declines in spending were also seen at electronics and appliance stores, grocery stores and gas stations, the report said. - 'Overly reassuring picture' - For now, there are "few signs" in key sales components that consumer demand for imported goods is collapsing, said Oliver Allen, senior US economist at Pantheon Macroeconomics. Despite declines elsewhere, sales were still up at furniture and clothing stores. But underlying sales volumes could drop in the coming months as tariffs are passed on, he said. Economists anticipate a more notable hit to consumer costs once businesses run down on existing inventory. "Tariffs haven't hit domestic prices in earnest yet, so these data paint an overly reassuring picture," said Nationwide financial markets economist Oren Klachkin. "We expect to see a larger impact in the summer when the levies will pass through into consumer prices," he added. Currently, Klachkin said, the consumer "isn't spending lavishly and is understandably price sensitive." A key question this week is how a weaker-than-expected retail sales report might influence the Federal Reserve's deliberations as the central bank opened its two-day policy meeting Tuesday. The Fed has been cautious when it comes to lowering interest rates further despite Trump calling for larger rate cuts in the face of benign inflation data. Policymakers are watching for the effects of tariffs on prices and the jobs market before acting further. The bank is widely expected to keep rates unchanged for a fourth straight meeting, while releasing its economic projections as well on Wednesday afternoon. Separately, US industrial production edged down unexpectedly in May as a drop in utilities output outweighed slight increases in manufacturing and mining. bys/ksb
Yahoo
3 days ago
- Business
- Yahoo
US retail sales slip more than expected after rush to beat tariffs
US retail sales declined more than expected in May, government data showed Tuesday, dragged by a slowdown in auto sales as consumers pulled back after hurrying to get ahead of President Donald Trump's sweeping tariffs. As Trump's levies flow through the country, analysts are keeping a close watch on how consumers -- a critical driver of the world's biggest economy -- respond to resulting uncertainty and any price increases down the line. Last month, overall sales fell by 0.9 percent from April to $715.4 billion, according to data released by the Department of Commerce. It was the largest decline since the start of the year, and bigger than the 0.6 percent drop expected by a consensus forecast. From a year ago, retail sales were up 3.3 percent, still a slowdown from the 5.0 percent rate in April. Analysts said consumers had likely brought forward major purchases in anticipation of Trump's tariffs -- the president imposed a sweeping 10 percent levy on almost all US partners in April. Trump also separately slapped tariffs on imports of steel, aluminum and automobiles, fueling concern that this would push inflation up in the coming months. Excluding autos and parts, retail sales in May were still 0.3 percent down from the prior month. Sales at motor vehicle and parts dealers slumped 3.5 percent on-month, while those at restaurants and bars fell 0.9 percent. Declines in spending were also seen at electronics and appliance stores, as well as at grocery stores. Sales at gas stations fell 2.0 percent from the prior month, the report said. "Further weakness in sales volumes probably lies in store, as more of the tariff-related increase in costs is passed onto consumers, weighing on real incomes," said Pantheon Macroeconomics in a recent note. Economists expect it will take a few months for the effects of new tariffs to show up in consumer costs -- and all eyes are on economic data during the summer. For now, a key question is how a weaker-than-expected retail sales report might influence the Federal Reserve's deliberations as the central bank gathers for its two-day policy meeting Tuesday. The Fed has been cautious when it comes to lowering interest rates further, with policymakers watching for the effects of tariffs on prices and the jobs market before acting further. The bank is widely expected to keep rates unchanged for a fourth straight meeting, while releasing its economic projections on Wednesday afternoon. bys/aha Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
National Post
6 days ago
- Politics
- National Post
Tony Abbott: How Anglosphere conservatives can thrive in the age of Trump
Article content As a consequence of the Trump tariff wars, Canada's conservative opposition leader went from being 20 points ahead in the polls to a narrow loss in April's election. And Australia's conservative opposition leader went from being competitive in the polls to a massive defeat last month. Despite Pierre Poilievre's fierce repudiation of the insults against Canada, and despite Peter Dutton's insistence that he would prevent U.S. tariffs against Australia, voters saw both as guilty by association. Donald Trump was a right-winger, many voters' reasoning ran; Poilievre and Dutton were right-wingers, therefore both were somehow 'mini-Trumps' who might be just as erratic should they gain office. Naturally, the Liberals in Canada, and Labor in Australia, revelled in attacking their 'Trump-like' opponents. Article content Conservative leaders' best response to the president's 'America first,' verging on 'everyone else last,' foreign policy is to declare that their first duty, likewise, is to their own country. After all, seeing one's own country as a 'shining city on a hill' and even as 'the last best hope of mankind,' to use Ronald Reagan's rhetoric, is the hallmark of conservative leaders. A deep patriotism is at the heart of all conservative thinking. Article content Article content A key difference between this president and his predecessors is that his love of America does not so readily extend to an embrace of America's like-minded allies; or to using American soft and hard power to extend American values throughout the world. Loyalty, sentiment, high-mindedness, and a 'love that pays the price' count for little with a transactional administration, even though it's America's readiness, up till now, to keep the world safe for democracy that's made it so widely admired. Article content A smart move by conservatives would be to push for much deeper cooperation between the other members of the Anglosphere. After all, Britain, Canada, Australia and New Zealand (the CANZUK countries) are all members of the Five Eyes security partnership and are all now members of the Trans-Pacific Partnership free trade deal. If America's security guarantees are weakening, there's a strong argument for Britain, supported by Canada and Australia, to step up; especially if the wider world is to continue to reflect the long Anglo-American ascendancy rather than a new Chinese one. And there's every reason to think that the current centre-left British, Canadian and Australian governments would be amenable to working more closely together on global issues if Trump's America is starting to go missing. Article content Article content It was always a mistake to see Reagan-Thatcher conservatism as exclusively, or even mainly, economic. Those two conservative titans respected freer markets as the best means of securing individual prosperity and national strength, not as ends in themselves. They supported smaller government and greater freedom because it's strong citizens rather than a nanny state that creates the best society. They saw love of country, a commitment to excellence, and personal responsibility as the key to a strong social fabric; much more so than 'equalizing' taxes and over-generous, incentive-sapping social welfare. Their record was freer trade with like-minded democracies, rather than with geo-political rivals; and of boosting local industry via robust competition and domestic deregulation rather than government subsidy. Article content Whether it's Trump Derangement Syndrome or the almost equally prevalent Trump Fascination Syndrome, the U.S. president's out-sized political personality is denying oxygen to everyone and everything that's not referencing him. Because America matters, and because the president has so much sway over what America does, the wild ride will continue. But what counts, in the end, is less what someone else does, that's up to him; and more what we do, that's up to us. Conservatives should respectfully dissent from any rogue actions by the current administration, while remembering that there will be a new one within four years. Donald Trump is just one manifestation of American conservatism, not the embodiment of it. And in the meantime, conservative leaders should get on with devising a credible policy agenda for their own countries and relentlessly making the case for change with their own voters. Article content
